All The Important Marketing Concepts For Students
Marketing is most certainly not a new word or trend. It has been a part of human civilizations for some time now. It gets complex as one delves deeper into the various terminologies and concepts attached to it. As the information world and the digital world are syncing ever so rapidly, the values of marketing are evolving with changing needs too. Not just interesting but also very profitable, the field of marketing is here to survive even in the poorest of economies. This is one of the many reasons why the intellects of today’s world are keenly interested in it.
The same interest is also attracting students of your likes to the field. It’s great to know that more curious minds are being drawn into a field, as versatile as marketing. Along with the vast opportunities, the web is also filled with excellent resources for marketing students. The opportunities are endless and the avenues keep growing every day. It makes for one of the very few careers, which can be equally challenging and exciting.
Thanks for visiting the blog. Here is the list of marketing concepts that you will learn today from this blog. Go ahead and click the topics below to know more about them.
- Marketing Environment
- Consumer Behaviour
- Organisational Buyer Behaviour
- Market Segmentation, Targeting and Positioning
- Branding and Product Development
- Pricing in Marketing Context
- Marketing Plan
- Customer Relationship Management
- The Consumer Decision Process
Marketing, in today’s age of cut-throat competition and technological advancements, is not devoid of influences. Every decision made by the firm or the brand is a product of a range of influences and pressures. A firm’s marketing efforts are affected by numerous factors such as company policies, employees, labour laws, tax regulations, and environmental regulations, to name a few. The very environment that the firm thrives in has the ability to affect it and shape its decisions, due to the former’s dynamic nature.
According to Philip Kotler, “a company’s marketing environment consists of the internal factors & forces, which affect the company’s ability to develop & maintain successful transactions & relationships with the company’s target customers”. Although the definition restricts itself to describing the effects that internal forces can have on the firm’s marketing effort, it is, in fact, a sum of internal and external forces within which a firm operates, which is termed as Marketing Environment.
The marketing environment can thus be broken down internal environment, micro environment and macro environment.
Any forces that affect or have the potential to affect a business, that is inherent to the firm itself, are classified to fall under the internal environment. These are challenges that come from within the firm, and thus, can be easily dealt with and manipulated by the firm itself. It comprises of individuals and organisations that are directly connected to the company.
Consider Target Australia, a retail chain owned and operated by the Wesfarmer Group. Its internal environment would comprise of its 24,000 strong workforce across its stores, distribution centres, support offices and buying offices, its cash position and cash flow, it’s physical and intangible assets that include the stores, distribution centres, the stock, the logo and brand name, the structures and materials. In the case of its employees, any demands from their end with respect to pay or benefits could affect Target’s budgets, employee satisfaction and even its customer engagement. Thus, Target would carefully consider its recruitment policies and pay attention to its employees’ performance and their annual reviews to ensure that they affect the business positively.
The micro environment comprises of forces and factors that are directly related to the company, albeit being external. These can include internal as well as external stakeholders, suppliers, intermediaries, consumers and competition.
Target Australia’s typical consumer base comprises mostly of women, early 30s onwards, with children and with an annual household income of about AU $65,000. Any change in the consumer tastes and preferences or consumer buying patterns would directly affect Target’s marketing decisions, pricing, product assortment and other marketing related aspects.
In such an interdependent environment, Target pays close attention to building a good relationship and communication strategies with its suppliers, consumers and other stakeholders. It also focuses on the actions of its competitors in terms of their pricing, product developments, branding exercises and so on.
Using Porter’s Five Forces Model, one can evaluate the impact of micro environmental forces on one’s area of business. It not only provides an insight into the extent of the impact but will also help the firm in designing and executing its market STP strategies .
Possibly the most uncontrollable of all environmental factors, the macro environment is a purely external force of influence to a firm. It is usually out of the control of the firm, and comprises of political, economic, social, technological, environmental and legal factors, better known as PESTEL
Consider the retail environment that Target Australia operates in. The retail sector is governed and affected by each factor that forms PESTEL. An increase in value-added tax or goods tax would effectively increase the price of the store’s goods. Similarly, policies on importing raw materials or finished goods could affect the retail chain’s sourcing policies. The development of RFID technology could affect the supply chain deliverables and tracking, while governmental norms on environmental aspects such as waste management and recycling could affect packaging and disposal of goods. Furthermore, Target Australia’s profitability could be affected by aspects such as changes in demographics and income levels of the consumers, the economic conditions of Australia and changes to labour laws according to the experts of ExpertAssignmentHelp
It is important to note that these forces are wider in terms of their impact, and also, largely uncontrollable. A proper analysis of these factors using tools such as PESTEL and SWOT would help a firm gain awareness and insight into the dynamic external forces, and leverage these forces to its advantage, if possible.
The marketing environment comprises of dynamic factors that affect and shape a firm’s marketing strategies. This combination of external and internal forces makes it prudent for firms to undertake a thorough analysis of the environment in which they operate, as only then will these firms be at a position to chalk out marketing strategies that can increase their profitability and investor wealth, while creating a positive space for itself in the consumers’ minds.
The shift from product orientation to customer orientation has stemmed from realizing the importance of consumers and their inputs towards building a firm ground for a company’s marketing strategies and brand exercises for itself, its products and its services. In order to cater to consumers effectively, companies need to understand them and their cognitive processes. Consumer behaviour, thus, is the key to understanding the thought processes of consumers in relation to their purchase decisions and buying behaviour, consumption, disposal, consideration sets and brand affinity.
Consumer behaviour is popularly known as the Psychology of Marketing and derives principles from psychology, sociology, anthropology, economics and marketing. According to the Consumer Psychologist, consumer behaviour can be defined as the study of individuals, groups, or organizations and the processes they use to select, secure, use, and dispose of products, services, experiences, or ideas to satisfy needs and the impacts that these processes have on the consumer and society. Consumer behaviour is a vast subject in itself and touches upon various aspects of why consumers behave the way they behave as suggested by experts at ExpertAssignmentHelp
Nature of Consumer Behaviour
- It is influenced by various factors, namely:
- Marketing factors such as product design, pricing, place, promotion, positioning, packaging, distribution and storage, and so on
- Personal factors that include gender, age, income profile and education level
- Psychological factors such as product perceptions, buying motives and attitudes towards the products and services
- Social factors like reference groups and social status
- Cultural factors such as social class, religion, castes and so on
- Situational factors like time, physical surroundings and social surroundings
- It is subject to dynamism or constant change; it is not static. Depending on the nature of products and services, the behaviour of consumers is prone to change. For example, a child living in Melbourne would be inclined to opt for bright and colourful Crocs for footwear. The same child would prefer Converse in his teen years and move on to more trendy footwear as he grows. In his middle years, he may opt for more formal footwear and in his senior years, may select footwear that offers more comfort than style.
- Consumer behaviour is dependent on the consumer himself and varies with different consumers and consumer groups. These differences could be due to the nature of the consumers, their cultural inclinations and their lifestyle. For example, a vegan will display different behaviour towards products, services and brands as compared to someone who is more liberal with his dietary choices.
- It also varies from region to region; people living in mainstream Sydney and Perth would display behaviour that is different from those residing in Ceduna.
- A good knowledge of consumer behaviour helps marketers devise appropriate strategies and plans with respect to product design, pricing, promotions, placement and distribution and positioning. A proper mix of strategies could translate into a purchase decision for the firm’s brands and products.
Black Box Model
A well-known theory of Consumer Behaviour, Philip Kotler’s Black Box Model focuses not on what goes on inside the minds of the consumer, but on the relationship between the marketing and environmental stimuli, and the consumer’s response.
This model is based on the assumption that buyers are rational and their responses are a result of logical and calculated decisions that are concluded after proper identification of the problem. However, in reality, most consumer decisions are not a result of rational decisions or problem awareness. That is if they are not looking for management assignment help
Consumer Decision Making Process
One of the main aspects of focus in Consumer Behaviour is the consumer decision-making process. A buyer decision process can be either simple or complex, depending on the nature of the product and the nature of the purchase. A consumer, who wishes to buy a candy bar from a local Target Australia store, may spend lesser time in deciding which brand he or she wants to purchase, as compared to someone who wishes to purchase a car. The latter will spend time comparing various brands, automobile showrooms, service quality and so on. There are various stages that a consumer goes through while undertaking a purchase.
Consumer Behaviour is rooted in aspects of buyer needs and motivation. Marketers do not necessarily create new needs but make consumers aware of their needs. These needs can be innate – biogenic or physiological needs that are primary requirements such as food and shelter, or acquired needs – needs that arise when one acclimatize to their culture and environment. Motivation is the driving force within individuals that compel them to take action. Marketers need to conduct adequate consumer behaviour research, both qualitative and quantitative, to identify what engages and motivates them. A deeper understanding of the consumer buying process, motivational theories, buying roles and needs analysis can also add to the creation of an effective marketing and communications plan.
Organisational Buyer Behaviour
Businesses operate to generate profits and wealth through value creation for its customers – these can be both end users and other businesses. Other organisation groups such as resellers, producers and governmental agencies comprise a huge chunk of the consumer base, generating demand for raw materials, equipment, manpower, products and other services. Since the B2B operations are different from the B2C transactions, it is safe to say that organisational buying behaviour varies from individual buying behaviour.
According to the Business Dictionary, organization buying consists of ‘people in charge of purchasing products and services for organizations, governments and business. Organizational buyers make buying decisions for their organizations and purchase products and services professionally. This type of buyer tends to be more knowledgeable than normal consumers.’
There are several differences between organisational buyers and end-consumers; they can be broadly categorised as differences in market demand and structure, decision-making process, buyer characteristics and buying patterns.
- Market Demand and Structure: The variations in market structure and demand should be recognised by the marketer, as these factors differentiate the organizational buyers from individual consumers.
- Geographical conditions: Organizational buyers tend to be situated in close proximity to one another. Australia’s oil refineries are primarily located in Victoria
- Buyer conditions: The buyers are fewer in number and larger in scope and magnitude or orders and operations
- Market conditions: In the case of vertical markets and industries, goods are sold only to those organizations that are related. For example, a cotton textile firm it would be supplied with yarn from a yarn firm and will then supply the textile to clothing manufacturers. Horizontal industries, however, supply to a larger pool of firms
- Demand: Organizational demand is derived from consumer demand – the demand for milk by companies in Victoria increases if there is an increase in demand for ice-creams or cheeses. The demand is also inelastic and typically remains unaffected by changes in prices in consumer markets.
- Buyer Characteristics: The different nature of buyers also calls out the need for a different perspective on organisational buyers.
- Involvement: Since the purchase will be complex and cash-heavy, several individuals are involved in the purchase decision
- Knowledge: Professional or organisational buyers are usually armed with extensive technical knowledge that will help them with their purchases
- Motivation: Rational factors such as economic standing and business requirements assist in an effective cost-benefit analysis
- Decision Making Process:
- Formality: In organizational transactions, there are several formalities that form a part of a transaction such as proposals, quotations, purchase orders and contracts, and so on
- Complexity: The products and services are more complex than traditional B2C transactions, which give rise to the formalities as previously mentioned
- Negotiations: The very nature of the purchases give way to a longer period between need identification and purchase decision than an individual customer
- The magnitude of orders: Since most of these purchases are in the nature of raw materials, office requirements and industrial needs, the purchase quantity tends to be large
- Intermediaries: B2B transactions usually take place between direct manufacturers and organisational buyers, without the involvement of middlemen
- Service: Organisational buyers require and demand service because the purchases have an immense impact on their sales, profits and cost implications.
Organisational Buying Process
The organisational buying process in a lot more process-oriented than the purchase decision process of an individual consumer. While several purchase decisions take place subconsciously for the latter, the former takes calculated steps and extensive research before reaching a purchase decision.
Participants in the Buying Process
Since organisational buying is not a simple affair, there are several individuals and groups involved who, directly or indirectly, contribute to the purchase decision.
- Users: These are the people or employees who would use the products or services. For example, the weavers or mill workers who spin cotton from NSW and Queensland would be the users of cotton bales
- Initiators: These are the persons who would initialise or request the purchase. The head of the production at the cotton mill which supplies to the makers of shirts in Victoria would be the initiator
- Influencers: These include people of groups who define specifications. The head of the production may consult with the head of stores and materials and also the firm to who they supply, as to what specifications are required
- Buyers: These are employees who undertake the action of buying or completing the purchase transaction
- Gatekeepers: These include liaisons or personnel who control access to the company, and can include the security, receptionist, secretary and so on
- Deciders: People who take decisions regarding the product requirements, vendors, rates and the like fall under this category
- Approvers: Personnel or people who approve the purchase comprise the approvers, and may include the purchase department and finance department personnel
Organisational buyer behaviour varies significantly from individual buyer behaviour. The process of the former is more complex, conscious and detail-oriented than that of the latter since there are a huge cost, volume, sales and profit implications involved in such B2B transactions.
Market Segmentation, Targeting and Positioning
Segmentation, Targeting and Positioning (STP) are the three vital components of a firm’s strategic marketing efforts. Organisations, in their endeavour to create a space for themselves in the market, may devise revolutionary products or services. However, this is not enough. They must also carefully identify who, among the population, would ideally purchase the product or service, and what they seek from such a transaction. A well executed and implemented STP program will help the firm in devising the proper marketing mix – the right product to be sold at the right place at the right price and in the right way.
STP is a sequential process, where a firm first splits the entire market into various groups based on certain criteria, then proceeds to select one or more of these groups based on the profitability and other criteria and finally creates a suitable space for the product or service in the minds of the consumers. Given below are the definitions of STP according to the Market Segmentation Study Guide.
- Market segmentation can be defined as the process of splitting a market into smaller groups with similar product needs or identifiable characteristics, for the purpose of selecting appropriate target markets
- Targeting refers to an organization’s proactive selection of a suitable market segment (or segments) with the intention of heavily focusing the firm’s marketing offers and activities towards this group of related consumers
Positioning is the target market’s perception of the product’s key benefits and features, relative to the offerings of competitive products
The first step in strategic marketing planning , segmentation is essentially slicing the entire market into various groups, based on a pre-determined set of criteria as it done in various marketing management assignment hep solutions. The population within each segment is homogenous, and across segments in heterogeneous. Using segmentation, firms can identify specific niches, market conditions, and people groups so that they can deliver a focused and more integrated marketing communications. The most common ways to segment the market are:
Demographic segmentation: Based on age, gender, education level, income, ethnicity, marital status, family size, profession and so on
Geographic: Based on country, region, urban-rural classification, climate, population density and landscape
Psychographic: Based on personality, emotions and behaviour that motivate purchase decisions and choices such as lifestyle, values, attitude and traits
Lifestyle: Based on entertainment, recreational choices, vacations and so on
Beliefs: Religious and political inclinations, cultural outlook, nationalist and values
Behaviour: Based on consumers’ nature of purchase, level of usage, disposal, brand affinity , benefit required, channels of distribution and response to marketing efforts
Targeting is essentially picking up one or more segments that have resulted due to the market segmentation process. There could be various criteria for selection of segments. Some firms may treat the entire market as a segment, since their offerings may not be differentiated according to segment composition (Eg: Coca-Cola). Others may carefully select one, two or more segments that they can best cater to. The following features must be present in a segment to fall within the target consideration set.
- Market and segment size of the segment: Both, the market as a whole, as well as the segments, must be of a considerable size. A smaller market will yield smaller segments, which could sometimes work in the firm’s favour if the segment is profitable. But if the segment is small in itself, the volume of sales generated will be small
- Difference: The segments need to have a clear-cut difference between each other; they need to be heterogeneous in terms of their composition
- Profitability: The expected or anticipated revenue generation and profits must exceed the costs of marketing
- Accessibility: Each target segment needs to have adequate accessibility to the firm’s products and services, and marketing communication
- Benefits: The entire point of segmentation is to tailor products and services that suit the varied needs of each segment. Hence, different segments need to be offered different benefits
Positioning refers to occupying a certain place in the minds of the target consumers. The last phase of the STP process, positioning of a product or service favourably, and using the benefits that consumers seek, is the focus of this step. Integrated marketing communications form an important part of positioning, as the firm needs to customise its messaged keeping in mind the product and service benefits sought, the popular medium of choice for the target market, the costs of such a marketing plan and the image that the firm wants to create in the minds of the consumers. Positioning also seeks to differentiate one’s offering from those of competitors’. In this context, points of parity (PoP) and points of difference (PoD) are utilised to aid in effective positioning as suggested by experts of ExpertAssignmentHelp
According to Strategic Brand Management, Points of Parity are usually the attributes or functionalities or benefits or any other marketing mix elements that are not unique to the brand and might be shared by some or all the competitors, as they mostly include the basic necessities for a brand to be considered in a particular category. Points of Difference are usually the attributes or functionalities or benefits or any other marketing mix elements that a consumer strongly associates with a brand, which he/she feels is not offered by and of the competitors.
Illustration of STP
Let us consider Tourism Australia’s STP strategy.
Tourism Australia has opted for different bases of segmentation namely geographic, lifestyle and demographic segmentation. It has split the world into various countries or regional groups, and has picked a handful of the largest, most profitable and most accessible groups as their target market. It has also categorised the market into various lifestyles, age groups, income profiles and so on.
Once the market was segmented into several groups that are homogenous within and heterogeneous across, Tourism Australia selected or targeted a few of these groups as follows:
- Market Regions: Australia, Americas, Europe, New Zealand, Greater China, Japan and Korea, and South and South East Asia
- Market Segments: Focus on a high yielding consumer segment, those who will spend more and do more on their trips to Australia. – Tourism Australia. The below is an excerpt from the Tourism Australia website
- Experience Seekers: This target market is highly predisposed to Australia’s offer and is more likely to stay longer, spend more and disperse to regional areas. They are looking for unique, involving and personal experiences from their holidays. Experience Seekers are long-haul travellers who are less affected by the traditional barriers to travel of distance, time and cost. They are more informed, interested and curious about potential travel destinations. They constitute around 30 to 50 per cent of all potential long-haul outbound travellers. Experience Seekers can be found among all age groups, income levels and geographic locations
- Youth: A new focus for the tourism board, the youth segment has been the focus for Tourism Australia, along with its other affluent segments, through their new campaign ‘There’s Nothing Like Australia’
In terms of positioning, Tourism Australia wishes Australia to be viewed as a holiday and vacation destination that boasts of affluence, class and a variety of experiences and is always welcoming. This is effectively portrayed through its communications via traditional print and television media, digital and social media campaigns.
A well-defined STP strategy is the core of a firm’s strategic marketing mix. It is essential to split the market in the right way, select the right segments and position the product or service in a favourable light and with benefits that competitors cannot offer, through effective messaging and tailored communications.
Branding and Product Development
At the heart of a successful marketing strategy lie two core aspects – a product and a brand. According to Philip Kotler, marketing is a social and managerial process by which individual and group obtain what they need and want through creating and exchanging product or value with other. This value creation takes place at the product and brand level.
A firm’s marketing mix consists of four components namely product, price, place and promotion. Kotler states that a product is a thing that can be offered to a market to satisfy a want or need. It can include physical goods, services, people, ideas, organisations and places.
A brand, on the other hand, varies from a product. Branding is a process by which firms aim to differentiate themselves, their products and services from those of competitors as described by experts of ExpertAssignmentHelp.
- Idea generation: Once the needs and wants to be satisfied are identified, along with the feasibility in terms of profitability and development, product or service ideas are identified. The sources for these ideas can come from various sources such as market research, employees, customers, competitors, consultants, suppliers and distributors
- Idea screening: The numerous ideas that are generated are subject to a screening process where only the ones that are physically and financially feasible are selected
- Concept development and testing: The concept or the feasible idea needs to be tested for its acceptability, appeal, usage and benefits and issues if any
- Marketing strategy development: A marketing strategy to launch the product or service must be devised, which lays out segmentation, targeting and positioning plans, pricing, distribution, promotional strategies, expected sales and profits
- Business Analysis: At this stage, a detailed analysis of the financial – profitability, expected volume of sales, cost of production, sales and marketing, cash flow position, and market share – is undertaken
- Product development: A prototype of the product is developed at this stage; once created, it is subject to a series of tests
- Test marketing: The product undergoes test marketing within a specific geographical area so that the marketing mix and strategies can be tested, monitored and modified if required
- Commercialisation: Once the product clears the test marketing phase, it is ready for release in its target markets. The firm needs to make decisions regarding the timing of the launch, the medium and location of the launch, and if the launch will be nationwide, or region-wise
Post this, the product can be found to fit into one of the four stages of the Product Life Cycle.
In order to better explain a product, Philip Kotler describes it to contain five levels; each level indicates a certain value that customers attach to a product. Customer satisfaction takes place only when the perceived or specified value exceeds or meets the customer’s expected value.
- Core Product: The first and most basic level of the product, the focus is on the purpose for which the product is intended. The core purpose of Sydney based Chilli Surfboards is to provide manoeuvrability for surfers over waves
- Generic Product: This level represents all physical attributes of the product. Chilli Surfboards are known for their bright colours, shape, sturdiness and durability
- Expected Product: Consumer expectations of the product are reflected at this level. A customer may expect long-lasting performance and speedy manoeuvrability from Chilli Surfboards
- Augmented Product: This level describes additional factors that work to set the product apart from those of competitors, including brand image and identity. Innovative and cutting-edge designs, twin fins, unique colour schemes are what set apart Chilli Surfboards from its competitors, including its brand name
- Potential Product: Any future additions or changes to the product are reflected at this stage. Chilli may work towards making its surfboards from reclaimed wood, or carbon-wrap flex, add additional fins and thrusters, and so on
According to the American Marketing Association, a brand is a name, term, design, symbol, or any other feature that identifies one seller’s good or service as distinct from those of other sellers.
Brand elements are the various components of a brand that helps to identify and differentiate it from competitors such as name, logo, symbol and package design. For example, the brand elements of Tourism Australia are its name and logo.
A brand is more than a product in the sense that it differentiates it in ways other than product related means; it helps the firm achieve competitive advantage through rational and symbolic means. Brands seek to create a positive experience for a certain product or service in the minds of the target consumer through continuous efforts, both from a product as well as marketing perspective. Branding is all about creating unique and significant differences between a firm and its competitors, through Points of Parity and Points of Difference.
One of the best ways to create a strong brand with strong and favourable associations in the minds of consumers is through Strategic Brand Management, which is the design and implementation of marketing programs and activities to build, measure, and manage brand equity. A brief overview of the strategic brand management framework is shown below.
It is equally important for a firm to focus on its product benefits as well as its branding efforts. An innovative product, developed using cutting-edge technology, will be a market hit provided it is effectively tested and marketed. However, the life cycle of products is becoming shorter day by day, just as the pace of technological developments in increasing rapidly. A good illustration for this point is that of smartphones. Competing firms release new models faster, in order to capitalise on the emerging technologies. However, inadequate branding exercises can cause these firms to disappear into oblivion as newer technology and players enter the market. Companies like Apple have done a remarkable job of branding themselves and their products, such that they can leverage both, their technical expertise as well as their brand image.
The Marketing Mix consists of four important variables that are used to devise a strategic marketing plan. A combination of these elements assists in identifying, selecting and targeting the right market segments, as well as effectively positioning product or service in the minds of the consumers such that it occupies a favourable space as compared to its competitors. One of the key elements of the marketing mix is Promotion.
According to the Business Dictionary, marketing is the management process through which goods and services move from concept to the customer. It includes the coordination of four elements called the 4 P’s of marketing – identification, selection and development of a product, determination of its price, selection of a distribution channel to reach the customer’s place, and development and implementation of a promotional strategy.
According to the American Marketing Association, Promotion is defined as the various communication techniques such as advertising, personal selling, sales promotion, and public relations/product publicity available to a marketer that are combined to achieve specific goals.It is one of the main components of marketing communication, wherein it seeks to tailor messages based on the interests of the target markets.
Essentially, promotion is communicating and raising awareness about a product, service or a brand through a melange of tools that are available to a firm, ranging from traditional print and media and word-of-mouth to digital and social media tools that have emerged over the last decade. The objective of promotional activities is to
- Inform –through raising awareness about a firm’s brands, products and services, and establishing a competitive advantage
- Persuade –generating an instant response i.e., sales
- Remind – to inculcate and maintain a steady level of interest and enthusiasm for a brand, product or service
Tools of Promotion
The tools of promotion, or Promotion mix, span across four broad avenues of marketing communication.
- Advertising: A form of communication designed to persuade potential customers to opt for a firm’s product over its competitors’, advertising involves making one’s products and services positively known to the target market segments. Advertisement must be a planned and consistent activity that will enable the consumer to remember the brand or product with ease, with or without any assistance. The commonly used media for advertising include
- Stationery – envelopes, letterheads, business cards
- Office or window display
- Press advertising – newspapers, magazines, journals
- Radio spots and advertising
- Direct mailers
- Out-of-home – hoardings, bill boards, bus and taxi advertising
- Ambient – branded cutlery, coasters, wall posters, corporate videos
- Point of sale – in-store digital advertising, floor stickers,shelf or counter posters, shopping trolley signage, playing interviews about the product in store
- Online – advertising on own website and other websites, back links, blogs, social media, search engine optimisation, search engine marketing
- Direct Selling: A business transaction, or point-of-sale interactions, also acts as promotional tools. This direct interaction between the sales personnel and the customer works effectively to spread the product and brand knowledge to the consumer, which could translate into sales.
- Sales Promotion: These include short-term incentives or promotional offers and schemes that encourage customers to purchase the product or service. These promotions are targeted towards end consumers, institutional buyers , wholesalers and retailers and employees. According to Small Business Development Corporation, Government of Western Australia, they include
- Consumer promotions, similar to ones offered at Target Australia
- Point of purchase display material
- In-store demonstrations, sampling and celebrity appearances
- Competitions, coupons, sweepstakes and games
- On-pack offers, multi-packs and bonuses
- Loyalty reward programs
- Business promotions
- Seminars and workshops
- Conference presentations
- Trade show displays
- Telemarketing and direct mail campaigns
- Event sponsorship
- Capability documents
- Trade promotions
- Reward incentives linked to purchases or sales
- Reseller staff incentives
- Corporate entertainment
- Bonus stock
- Sales Force Promotions
- Sales competitions with prizes or awards
- Public Relations: According to the Public Relations Institute of Australia, PR is defined as the deliberate, planned and sustained effort to establish and maintain mutual understanding between an organisation (or individual) and its (or their) publics. Essentially, it refers to building good and maintained relationships with various stakeholders of the organisation through a favourable corporate image, positive word of mouth (MKA10) and referrals. Most common PR tools include
- News creation and distribution
- Special events – news conferences, grand openings, product launches
- Speeches and presentations
- Educational programs
- Annual reports, brochures, newsletters, magazines and presentations
- Community activities and sponsorships
Investing in Promotions is an important way to increase awareness regarding a firm’s offerings and move from across the AIDA framework – Attention, Interest, Desire, Action. A blend of all the four elements of the marketing mix will help in the creation of an effective marketing plan; however, the marketing mix must be flexible so that it can grow, change and mature as the target market changes.
Pricing in Marketing Context
Typically considered in isolation from the other elements of the marketing mix, pricing is still one of the most important elements of marketing; if done right, pricing is responsible for the cash inflow for the organisation by way of sales transactions. Pricing is also related to product positioning – the higher the price of a product or a service, the more luxurious it is considered, in general scenarios.
Pricing is the determination of the economic value that a company will receive in exchange for the goods and services that it produces and sells. According to the Economic Times, the price is the value that is put to a product or service and is the result of a complex set of calculations, research and understanding and risk-taking ability. A pricing strategy takes into account segments, ability to pay, market conditions, competitor actions, trade margins and input costs, amongst others. It is targeted at the defined customers and against competitors. Pricing encompasses not just a monetary value attached to a product or service; it also carries the firm’s desired profitability and costs incurred.
The firm spends a great deal of time to determine the right price at which their products or services must be sold. While determining the pricing strategy, several factors must be taken into consideration, such as the goal of the business – to increase profitability, increase and protect the market share, defend the firm from competition or to enter into a new market. Further, it must undertake a thorough analysis of its target market, to understand what drives the consumers.
Pricing strategy begins with an analysis of the market – the optimal price for a given product or service. Firms work to determine the total cost incurred to produce one unit of a product or service, and then conduct market research which would include focus groups and comparative price analyses to determine the point where the pricing strategy commands an equilibrium – the company’s willingness to supply the product at a particular price is equal to the market’s willingness to purchase at that price. The following sequence of steps might be followed by firms to develop an effective pricing strategy.
- Developing a marketing strategy through market analysis, including segmentation, targeting and positioning (MKA4)
- Marketing mix decisions to define the product, distribution strategies and promotion/marketing communications
- Demand curve estimation to understand the price elasticity for the firm’s product or service
- Cost calculation to determine the fixed, variable, direct and indirect costs that are associated with the product or service
- Evaluating the impact of environmental factors on pricing such as competitors actions, legal and tax regulations and so on
- Setting pricing objectives for the firm such as current profit maximization, revenue maximisation, volume maximisation, maximising profit margin, quality leadership, cost leadership, partial recovery of costs, market survival and maintaining or challenging the status quo
- Determine pricing by selecting the pricing method, pricing structure, and defining the discounts and offers
For new product releases or to gain entry into a new market segment, the business objective is to either maximise profits or maximise market share.
- Skim pricing refers to skimming the topmost level or the ‘cream’ of the market by setting a high price and selling the product to consumers who are less price sensitive. Skimming is a method to maximise profitability. A higher price is charged for a certain period – till the maximum amount is recovered before the segment attracts competition. Skimming works best when the demand is relatively inelastic, there are no larger cost savings with larger volumes and the firm cannot work with low-profit margins due to the lack of capacity, both financial and physical, to produce large volumes. When Nike forayed into the Australian market, they adopted the skimming strategy to increase their market share. Apple phones in Australia are charged a higher rate when launched, and the prices are eventually reduced
- Penetration pricing method aims to maximise the market share or volume of products sold, by setting artificially lower price to products. It works best when demand for the product is highly elastic, there is an inverse proportional relationship between costs and volumes, the product has the ability to quickly gain mass appeal and competition is high. Prices will be raised once the launch or promotion period is over. Schweppes had priced its products in the mid to lower price range in order to boost its sales volumes. New housing loans from banks in Sydney follow a similar strategy
- Premium pricing strategy involves selling products and services at constant higher process. This strategy works well in segments where a strong competitive advantage exists for the company. Porsche cars command a premium price, and as do Gillette blades, in their respective categories
- Economy pricing refers to the no-frills pricing strategy where profit margins are wafer thin and overhead costs like marketing and advertising costs are low. The products that are so pried appeal to the mass market and this command a high market share. Tide detergents are a great example for economy pricing strategy
To achieve pricing objectives, firms may opt from among several pricing methods.
- Cost-plus pricing involves setting the price at the cost of production plus a certain profit margin
- Target return pricing is adopted to set the price such that a target return on investment is achieved
- Value-based pricing is based on the value that consumers associate with a product or service
- Psychological pricing is based on factors that signal to the consumer that the price for the product is fair – product quality, brand image and so on.
Pricing is the only one of the 4 Ps of marketing (MKA8) that generates direct revenue; the rest are cost centres. By identifying the pricing objectives and analysing the target market, the right pricing method can be selected and employed. Moreover, the firm’s pricing strategy must be flexible to accommodate the changes in technology, market conditions and the product’s stage in the product life-cycle.
A shift from the production orientation to the marketing and customer orientation has resulted in the emergence of newer, better and faster methods and tools of reaching out to target consumer groups . For a firm to create a favourable space in today’s competitive market scenario it is not enough for the firm to develop and release an innovative product or service; if consumers are not aware of such a product there is a chance that the product may not result in fulfilment of the firm’s objectives. Hence, a comprehensive marketing plan is the need of the hour.
A part of the overall business strategy, the marketing plan is a comprehensive and consolidated blueprint which chalks out the overall marketing efforts of an organisation. It includes perspectives drawn from the firm’s finance, production, operations and other teams, core and support, to devise and outline an effective plan for marketing activities and integrated marketing communications.
According to Business Dictionary, a marketing strategy is an organization’s strategy that combines all of its marketing goals into one comprehensive plan. A good marketing strategy should be drawn from market research and focus on the right product mix in order to achieve the maximum profit potential and sustain the business. The marketing strategy is the foundation of a marketing plan. According to Philip Kotler and K.L. Keller, the marketing plan can function from two points: strategy and tactics.
Steps to Create a Marketing Plan
The first step of the marketing plan would be to set specific, measurable, ambitious yet achievable, realistic and time-bound goals (SMART), which reflect the overall goals of the organisation. This step requires a thorough analysis of the organisation’s goal for that period in question, and finding a way to fit into that goal. The overall goal of Tourism Australia is to grow overnight tourism expenditure to over $115 billion by the end of 2020 through their new strategic approach, Tourism 2020. Thus, the marketing goal would be to boost tourism through strategic marketing communications and creating unique experiences accor to experts of ExpertAssignmentHelp
Define the organisation:
It is vital to establish a definition of the organisation, its market presence, goals and objectives, future outlook and its impact on and by its environment . This will help the marketing team gain an understanding of the forces of internal and external environment that could positively or negatively impact any marketing campaign. In the case of Tourism Australia, it is an Australian Government agency responsible for attracting international visitors to Australia, both for leisure and business events, with a purpose is to increase the economic benefits to Australia. Since it operates in a travel and hospitality industry, the agency is bound by factors, both global and local, such as currency fluctuations, economic standing of the tourist nations, global events, local responses, cultural sensitivity and tolerance and so on
Define the market
At this stage, the marketing team needs to devise its segmentation and targeting strategies (MKA4). The firm will need to group the entire market into specific heterogeneous groups which are homogenous within, through geographic, demographic, psychographic, lifestyle or benefit segmentation strategies. Post segmentation, the team will be required to select one or more segments which they can best cater to, which is sizeable and will help the firm achieve its strategic objectives. Tourism Australia has segmented the market using geographic and lifestyle segmentation strategies. From the segments so formed, it has selected 17 core geographic markets across the Americas, Europe, New Zealand, Greater China, Japan and Korea, and South and South East Asia. From the lifestyle segments, it has targeted the ‘Experience Seekers’. This common segment across different cultures, receptive to the Australian experience is comprised of individuals, groups and families that are highly predisposed to Australia’s offer and is more likely to stay longer, spend more and disperse to regional areas.
The firm needs to create a favourable space for its offerings in the minds of its target consumer groups , such that they are well differentiated from those of its competitors. Positioning is achieved through tailored marketing communications via various media – television, print, OOH, social and digital media. According to Tourism Australia, Experience Seekers can be found among all age groups, income levels and geographic locations; they are experienced international travellers, opinion leaders, open minded and selective in their media consumption. Hence the agency has to position Australia the destination for unique, involving and personal experiences.
Enhance product/service offering
This step requires determining a proper marketing mix for the firm – product , price , place , promotion , along with effective branding exercises. The product/service offerings should be reflected through the firm’s brand promise and image, such that it has a distinct competitive advantage. Tourism Australia emphasises on its Unique Australian Experiences – seven quintessential Australian experiences that appeal to the target market.
Develop marketing tactics
Choosing the right marketing elements, each in the right amount, are essential for a successful marketing campaign. Tourism Australia focuses its marketing efforts on building Brand Australia. Its positioning statement mentions the following: The people of Australia are friendly and straight talking and open. Their sense of mateship and their no worries attitude make all visitors feel welcome. They make it easy to enjoy adventures beyond imagination. Whether it’s in Australia’s wide-open landscapes, pristine oceans or vibrant cities, a holiday in Australia is an opportunity to experience a vast yet accessible adventure playground. You don’t just visit Australia, you live it.
Brand Proposition: On holiday in Australia you don’t switch off you switch on. The unique experiences you have and the people you meet will make you feel uplifted and full of life.
Brand Personality: High spirited, down to earth, irreverent, welcoming.
Every point of consumer engagement must be ripe with the firm’s communication strategy, through the media that the consumers are most likely to pay attention to (MKA6). Tourism Australia’s latest campaigns – Restaurant Australia and There’s Nothing Like Australia – has Brand Australia as its base, and works with different media tools such as television ads, print ads, still and moving footage, screensavers and digital wallpapers, promo posters, OOH advertising, eNewsletters, campaign content widgets, postcards, digital and social media tools to engage and communicate with target consumers
Plan the budget
The marketing plan must devise its marketing strategies keeping in mid the allocated budget for various activities. Each item on the agenda must be associated with a cost, such that the marketing team does not exceed the budget allocated for this purpose
Create an implementation plan
Once all the aspects of the marketing strategy and campaign have been covered, an implementation plan must be put in place – where, when, how, for how long, cost implications and so on
A key aspect of the marketing plan, the firm must set milestones for achievement, and progressively measure the campaign’s success in reference to the expected results. This must be done on a continuous basis, along with feedback collection an recommendations for any changes
A well devised and comprehensive marketing plan works as an effective tool to help the firm reach its strategic objectives. A collective effort, the marketing plan works as a roadmap as well as a yardstick to measure the firm’s success.
In order for a company’s products and services to be able to reach its target consumers effectively, it must be made available to them. This aspect of locating the products in close proximity to the firm’s target market groups is taken care of by distribution, which forms the Place ‘P’ of the marketing mix.
According to the Economic Times, distribution means to spread the product throughout the marketplace such that a large number of people can buy it. It involves making the product available to the consumers for either conversion into products, or for final consumption. Distribution typically involves the following activities:
- The location of the business
- The location of the firm’s target market
- Ways to reach the target market
- Warehousing and storage of stock
- A good transport system to transport goods to various geographical locations
- A tracking system to ensure that the right goods reach the right place at right time and in the right quantity
- Efficient packaging which takes accommodates for the wear and tear during transport
- Tracking locations for best placement of the product so that it is available to a majority of the consumers
- Stock return capabilities
Based on the nature of the goods, a firm can select one among the following common distribution strategies.
- Intensive distribution – commonly employed to distribute low-priced or impulse purchase products such as chocolates and soft drinks. Woolworth’s stocks its products through intensive distribution
- Exclusive distribution – distribution of goods is limited to a single outlet; the product is typically highly priced, and requires the intermediary possess extensive knowledge about the product. Rolls Royce showrooms and dealerships in New South Wales and Queensland are excellent examples of this distribution strategy
- Selective Distribution – a handful of retail outlets are selected to stock and distribute the product. This strategy is common with products such as computers, televisions, household equipment and appliances. Apple in Sydney uses selective distribution to distribute iPhones and iPads to certain speciality stores
Channels and Intermediaries
Distribution of products typically takes place through distribution channels. These are interdependent organisations that work to make the product available to the end users, also known as intermediaries. These channels include wholesalers, retailers, e-commerce websites, consultants, catalogue sales teams, direct sales force dealers and home shopping networks. A firm can opt for none, one or a mix of distribution channels. This also depends on the type of products that are offered for sale. For example, Target Australia goes through a minimal number of intermediaries and channels to stock perishable items such as fresh produce, meat, eggs and milk. On the other hand, it may use distributors and stockists for household items such as detergents. Further, it opts for buying houses for is apparel and accessories.
Types of Channels
- Distributors: They engage directly with the manufacturers, and typically maintain exclusive purchasing contracts and agreements with the manufacturers. They are the direct point of contact with consumers, for the manufacturers. Distributors, generally, do not supply directly to the end consumers; they sell the products to wholesalers and retailers who will then resell the products
- Wholesalers: These intermediaries are purchasers of goods in bulk, directly from the distributors. Their large buying volumes are substantiated in lowered costs of goods. These goods are then resold to retailers, with an added margin for the wholesalers
- Retailers: These are typically small as well as large businesses that sell products directly to end consumers. They purchase smaller volumes of goods from different wholesalers or distributors
Channel Design and Channel Mix
A firm can opt for any channel design it wishes to have, after considering the nature of the goods it wants to sell and/or stock, the reach of the channels, the cost implications of each channel design and the feasibility. The firm can also opt for more than one distribution channel, again dependent on factors such as the product perishability and so on.
According to Transfreight, logistics is the planning, execution, and control of the movement/placement of goods and/or people, and the related supporting activities, all within a system designed to achieve specific objectives. It is a part of supply chain management and controls the physical flow of goods to reach the final users. Logistics is an important aspect of various firms across industries such as DHL, Target Australia, Nike, Innocent beverages and so on as suggested by experts in ExpertAssignmentHelp.
While devising a logistics plan, firms must carefully consider the following:
- Planning and scheduling production
- Order quantity (minimum and economic), raw material supply
- Supply of finished goods per type and style of product
- Storage and warehousing of products so that they reach the consumers in a good condition
- Channels of distribution
- Stock control, invoicing and transportation tracking systems to be employed
The main function of distribution is to reduce the geographical gap between the producer and the purchaser, through the seller. It is important for firms to consider the type of product, the costs of each channel and their reach before finalising on a particular distribution strategy and distribution mix. Firms also need to effectively manage these channels by offering channel motivation schemes such as higher margins to certain intermediaries, special deals, premiums and advertisement allowances. They must also possess the ability to resolve vertical as well as horizontal channel conflicts which could arise as a result of encroachment by other intermediaries and lower margins among other reasons.
Customer Relationship Management
A firm’s marketing efforts are comprehensive strategies that encompass the marketing mix, segmentation, targeting and positioning, branding activities and integrated marketing communications, all targeted towards various consumer groups, both organisational and end consumers. These consumer-centric strategies have resulted in tailor-made marketing communications that work to attract, maintain and expand the consumer base. In this context, it is of utmost importance for firms to build a strong consumer base, keep them engaged and build loyalties through various customer-centric programs such that existing consumers are engaged, and new consumer relationships are forged.
According to Search CRM, customer relationship management (CRM) refers to practices, strategies and technologies that companies use to manage, record and evaluate customer interactions in order to drive sales growth by deepening and enriching relationships with their customer bases. Business Dictionary also defines customer relationship management as a management philosophy according to which a company’s goals can be best achieved through identification and satisfaction of the customers’ stated and unstated needs and wants and a computerized system for identifying, targeting, acquiring, and retaining the best mix of customers.
In its very essence, customer relationship management assists a business in profiling prospective customers, understanding their needs and wants, and building lasting relationships with them by offering them tailored or most suited products and enhanced customer service. It functions as an integrator between back and front office systems to create a wide database of customer details, past purchases, and technical support. This database is used to present a consolidated and unified face to the customers; it aids in improving the quality of relationship between the company and its customers.
Customer relationship management refers to practices, strategies as well as technologies and systems that are used by companies to manage and analyze customer interactions and customer-centric data throughout the customer lifecycle. This is undertaken with the goal to improve business relationships with customers, enabling customer retention and loyalty, and driving sales volumes. In this context, CRM systems are designed and implemented to create a database of customer information acquired through different channels or points of contact between the target consumers and the firm – company or product website, direct or telephonic contact, web chats, direct mail, marketing collaterals, social and digital media. CRM systems equip sales staff with detailed information about customers – personal information, purchase history, buying preferences, feedback and concerns.
An effective CRM strategy is based on four pillars, and coordination between them is of the utmost importance to ensure CRM goals are met.
- Technology: this includes the technology required to support CRM such as software and hardware, digital and social media engagement platforms, comprehensive database systems to store customer information and so on. It involves the Integration of various company-customer touch points to deliver a single, real-time and data-backed view of each customer. It assists in development of the ability to sell what and when the customer is ready to buy according to ExpertAssignmentHelp.
- People: the users and information builders, their skills, abilities and attitudes constitute this pillar. It also involves empowering them, creating a self-serve capability and identifying the needs of the employees such that they can add value to the organisation
- Process: This pillar includes all the processes used by the firm to access and interact with customers to generate and convert new leads into new users. It also works to collaborate across customer and non-customer tiers, distribution channel intermediaries and suppliers to achieve the ideal value generation for each customer
Tiers of Non-Customers
- Knowledge and insight: Using knowledge about consumer buying patterns , consumer behaviour and industry trends to effectively reach out to and engage with the right set of customers
- Loyalty programs: Probably the most popular of CRM techniques, loyalty programs are widely used in the retail sector. Through loyalty programs, firms gain information regarding customer contacts, demographic profile, preferences and so on. Using CRM software, businesses can tie customer purchases to loyalty programs, and gain insights into what they are most likely to purchase and subsequently, tailor offers and schemes to these customers. In order to ensure repeat purchases, loyalty programs come with reward points that cumulate each time a consumer completes a transaction. These points can be redeemed against future purchases. The loyalty programs are best reflected via customer tiered programs. Retail chains like Target Australia use Coles reward cards to supplement their loyalty program
- Direct interactions: Another great way to build lasting relationships with customers, direct interaction involves face-to-face or digital interactions with customers at various points of contact with the company. This way, the firm has first-hand knowledge of what the customers want, their buying preferences and so on. It results in increased brand loyalty and generates positive word of mouth, as customers feel valued and taken care of. The customer-facing staff of Woolworths, Tasmania are encouraged to engage with customers during their shopping experience, to be able to address any issues and create a favourable brand positioning
- Feedback: Soliciting customer feedback helps a firm identify its shortcomings; collecting feedback gives companies an insight into what customers seek from them. This will help in addressing the issue promptly and forging fruitful relationships with the customers.
A good CRM system is a well-amalgamated system of people, technology, business outlook and customer engagement, backed by sales, marketing, support and feedback mechanisms. These help in creating engaging relationships with existing customers, identifying and acquiring new customers, encouraging repeat purchases and maintaining brand loyalty. The benefits of an effective CRM program include
- Identifying and categorising leads: A CRM system can help companies identify and add new leads with ease, and have them categorised accurately. A firm can create customised pitch documents in a lesser response time. Comprehensive, accurate, centrally held and data backed insights about customers and prospects will enable sales staff to effectively engage with the right set of consumers
- Increase in referrals from existing customers: A better understanding of customers will result in greater cross-selling and up-selling opportunities, and better customer service. This will result in satisfied customers, who are 33% more likely to become repeat customers
- Improving products and services: Data-backed and comprehensive information gives firms unprecedented insights into what customers say and feel about them so that they can improve on offerings, spot issues and rectify them quickly.
The Consumer Decision Process
Customer is king – this popular and globally accepted statement has formed the basis for today’s Customer–Centric and Holistic orientations towards marketing, as compared to the Production orientation that was prevalent until the 1950s.
Today, every product that is introduced into the market as a new entrant, or as a reinvention of an already existing product, is so done keeping in mind what the consumers want and need, and not just what the producer can produce.
In a marketplace where consumers’ needs and wants are drastically changing(MKA1), and companies are furiously trying to capitalize on these needs by introducing new products and brands, how does the consumer decide what he or she wants to buy? What compels a consumer to purchase a particular brand from a myriad of brands that serve the same or similar purpose?
The Buyer Decision Process or the Consumer Decision Process is one of the many intriguing aspects of Consumer Behaviour According to James F. Engel, Roger D. Blackwell and Paul W. Miniard, Consumer Behaviour can be defined as ‘the mental and emotional processes and the observable behaviour of consumers during searching for, purchasing and post consumption of a product or service.’ Broadly, the definition elicits the main phases of Consumer Decision Making Process – searching, purchasing and post-consumption actions.
The Business Dictionary defines Consumer Decision Making as ‘the process by which consumers identify their needs, collect information, evaluate alternatives, and make the purchase decision. These actions are determined by psychological and economic factors, and are influenced by environmental factors such as cultural, group, and social values.’
Steps in Consumer Decision Making
The Consumer Decision Making Process is a five-fold approach; the extent to which each of the steps is undertaken by consumers and the amount of time and effort spent on each step varies significantly based on the type of purchase that the consumer wishes to make. On one end of the spectrum, we have low involvement purchases such as purchase of salt, sugar and so on. Such purchases do not require extensive information search due to the nature of the product, and the wavering brand loyalty – customers may or may not be loyal to a particular brand of sugar or salt. On the other hand, high involvement purchases such as purchase of luxury cars or jewellery demand greater time be spent on the decision making process. Moreover, individual buyer process varies significantly from organisational buying behaviour and process (MKA3).
The steps involved in the decision making process are:
- Problem/Need Recognition: Any purchase decision begins with the identification or recognition of a problem. The problem or need typically stems from one of two stimuli, or both.
- Internal Stimuli
- External Stimuli
The stimuli are in turn, affected by the individual’s level of need, and better explained by Maslow’s Theory of Needs.
Consider Sam, a resident of Sydney, who owns a pair of jeans that have gone out of style. He finds himself needing a new pair of jeans that are trendy and currently fashionable. He recognizes his problem to be the lack of a pair of good, fitting jeans that are within the norms of the latest fashion fad.
- Information Search: Once the consumer has identified his or her need, he/she begins the process of information search. In the context of purchasing a pair of jeans, Sam may look for information from various sources such as
- Internal sources: He had always wanted to own a pair of Diesel Jeans
- Group sources: Information from peers and social groups regarding the trendiest brand of jeans, or jeans that fit the best, could help Sam in deciding which brand to purchase from
- Marketing sources: Various companies engage in marketing communications to demonstrate the benefits that their brand can offer to consumers.
- Experiential sources: Sam himself may have experienced a particular brand in the past, which acts as a source of information. He may have tried on a pair of Levi’s jeans during his previous shopping trip and may have liked the colour
iii. Evaluation of Alternatives: By investing time and effort in seeking information, the consumer would come across a few alternatives that fit his/her requirement. The consumer would have to evaluate each alternative and what it offers, in order to make a final decision. For example, Sam may narrow down his choices to Diesel, Levi’s and Lee. Each brand may offer a certain benefit. Sam will then rank the benefits according to the features he requires the most.
- Purchase: The consumer finally makes a choice from among the various alternatives, and purchases his/her brand of choice.
- Post-Purchase Decision: Once the product has been purchased and utilized or consumed, the consumer gains an experience of the product, which could be either satisfactory or unsatisfactory(MKA10) (broadly). Customer satisfaction is usually, though not always, followed by repeat purchases (depending on the type of product), positive word-of-mouth and recommendations. Similarly, an unsatisfactory experience will result in negative word-of-mouth about the brand.
For the most part, the consumer decision-making process takes place without us even realising that it has happened. Every day, we unconsciously go through the process while purchasing staples or daily requirements; we are more conscious of the decision making process and the steps involved when the purchases in consideration carry a higher financial or status value.